NBA cap projected to increase more than anticipated
More money for owners, players, and teams with their cap room is looking lightly according to early projections.
Various media outlets reported late Friday that the NBA had issued new projections for the salary cap and luxury tax thresholds for next season. The final figures are issued in July and are based off of "Basketball Related Income." The early projections are positive and show a little more wiggle room for teams going into next season. From luxury tax expert Larry Coon:
The NBA issued new projections for the 2014-15 and 2015-16 salary cap and luxury tax thresholds. The 2014-15 salary cap is now projected to be $63.2 million and the tax level is projected to be $77.0 million. The numbers for 2015-16 are now projected to be $66.5 million and $81.0 million, respectively.
Note that these are only updated projections. The official numbers won’t come out until July, when the league conducts its audit. The cap and tax thresholds are based on revenues for the current season. When they count all the beans in July (that’s what the July Moratorium is for) they also project the revenues for the upcoming year. They then take 44.74% of that projected amount, subtract projected benefits (a little over $200 million) and divide by 30 (the number of teams in the league) to get the cap. The luxury tax uses a similar formula, but is based on 53.51% of projected revenues.
The salary cap and luxury tax values for the current season are $58.679 million and $71.748 million, respectively, which means the new cap projection for next season represents a 7.7% increase over this season. This is a pretty big jump — the league’s baseline assumption for year-to-year increases is 4.5%. It would indicate a projected BRI (Basketball Related Income, i.e., revenues) of about $4.75 billion for next season.
The projections have multiple impacts. For starters, as Coon notes, with revenue trending so sharply up, this could prevent a lockout in 2017, or at least a prolonged one.
Additionally, the extra room could help out teams like the Lakers who will have limited room with Kobe Bryant's extension, or the Bulls, should they decide to make a run at Carmelo Anthony. It gives everyone a little more room to pursue free agents, though it's not a life-changing difference.
It's also further signs that even in a season marred by injuries and largely uninspired play by the Eastern Conference, the game keeps growing financially, and the owners are reaping the benefits.
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